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Tawater v. Healthcare Service Corp.

United States District Court, D. Montana, Great Falls Division

December 3, 2018





         Jennifer Tawater filed a Complaint against Health Care Services Corporation d/b/a Blue Cross and Blue Shield of Montana (“BCBSMT”) on February 26, 2018. (Doc. 1.) Tawater alleges underpayment of medical benefits under an employee welfare benefit plan (“the Plan”) administered by BCBSMT. Id. at 2. The Employee Retirement Income Security Act of 1974 (“ERISA”) governs the Plan.

         BCBSMT filed the instant Motion to Dismiss on April 30, 2018. (Doc. 12.) The Court conducted a motion hearing on June 25, 2018. (Doc. 35.) The Court requested both parties submit supplemental briefing on the effect that assignment under the Plan has on Tawater's standing to sue BCBSMT. Id. Tawater filed her supplemental brief on July 6, 2018. (Doc. 36.) BCBSMT filed its brief on July 16, 2018. (Doc. 37.)


         Tawater was admitted to Mercy Medical Center in Williston, North Dakota on July 9, 2014. (Doc. 27 at 7.) The attending emergency room physician determined that Tawater needed to be transferred to Trinity Hospital in Minot, North Dakota. Id. Guardian Flight, Inc. (“Guardian”) transported Tawater from Williston to Minot on July 10, 2014. (Doc. 28-2 at 2.) Guardian is an out-of-network medical transport provider. (Doc. 13 at 3.) Guardian billed Tawater $43, 881.92 for the transport from Williston to Minot. (Doc. 28-3 at 2.)

         The Plan administered by BCBSMT insured Tawater at all relevant times. (Doc. 13 at 4.) The Plan required Tawater to submit her transport claim to BCBSMT “no later than 12 months from the date of service.” (Doc. 13-1 at 50.) BCBSMT sent Tawater's father an Explanation of Benefit (“EOB”) on July 28, 2014. (Doc. 28-3 at 2.) The EOB indicated that the total allowed amount for the transport under the Plan was $13, 222.44. Id. The EOB noted that Tawater remained responsible to Guardian for the unpaid amount of $30, 659.48. Id.

         Tawater signed Guardian's transport agreement before the transport on July 10, 2014. (Doc. 28-2 at 2.) The transport agreement assigned Tawater's right of payment to Guardian. Id. Tawater's transport agreement with Guardian states, in pertinent part, as follows: “I request that payment of authorized Medicare, Medicaid or other insurance benefits to be made on my behalf to Guardian Flight. I assign Guardian Flight all right, title and interest in all benefit plans from which my dependents or I are entitled to recover.” Id.

         The Plan permitted Tawater to assign her right of payment to a medical provider. The Plan's assignment provision reads as follows:

All Plan benefits are payable to a Participant, Qualified Beneficiary or Alternate Recipient, whichever is applicable. All or a portion of the benefits payable by the Plan may, at the Covered Person's option and unless the Covered person requests otherwise in writing not later than the time of filing the claim, be paid directly to the health care provider rendering the service, if proper written assignment is provided to the Plan. No. payments will be made to any provider of services unless the Covered Person is liable for such expenses.

(Doc. 13-1 at 106.)

         The Plan likewise established a statute of limitations period. The Plan's limitations provision provides as follows:

No action at law or equity will be brought to recover on the Plan prior to the expiration of sixty (60) days after proof of loss has been filed in accordance with the requirements of the Plan, nor will such action be brought at all unless brought within three (3) years from the expiration of the time within which proof of loss is required by the Plan.

Id. (emphasis added).

         The July 28, 2014, EOB explained that Tawater or her authorized representative could “appeal the decision within 180 days from the receipt” of the EOB if Tawater disagreed with the “denial or partial denial of a claim.” (Doc. 29-3 at 3.) Guardian filed a timely appeal of BCBSMT's adverse benefit determination on September 15, 2014. (Doc. 28-4 at 2.) BCBSMT denied Tawater's appeal on October 24, 2014. (Doc. 29-6 at 2.) Tawater, through her counsel, subsequently sent BCBSMT a letter restating Tawater's appeal on February 1, 2017. (Doc. 28-9 at 2.) BCBSMT denied Tawater's February 1, 2017, appeal as untimely. (Doc. 28-10 at 2.)


         A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of a complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). The Court “must take all allegations of material fact as true and construe them in the light most favorable to the nonmoving party” when evaluating a Rule 12(b)(6) motion. Kwan v. Sanmedica Int'l, 854 F.3d 1088, 1096 (9th Cir. 2017) (quoting Turner v. City & County of San Francisco, 788 F.3d 1206, 1210 (9th Cir. 2015)). The complaint must allege sufficient facts to state a plausible claim for relief to survive a motion to dismiss. Taylor v. Yee, 780 F.3d 928, 935 (9th Cir. 2015).

         Federal courts generally view “with disfavor” Rule 12(b)(6) dismissals. Rennie & Laughlin, Inc. v. Chrysler Corp., 242 F.3d 208, 213 (9th Cir. 1957). “A case should be tried on the proofs rather than the pleadings.” Id. The Court may consider documents on a motion to dismiss “whose contents are alleged in the complaint and whose authenticity no party questions, but which are not physically attached to the [plaintiff's] pleading.” Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994).

         I. Statute of Limitations Provision

         BCBSMT argues that Tawater filed her Complaint after the Plan's three-year statute of limitations period had expired. (Doc. 13 at 10.) The Plan required Tawater to appeal her adverse benefit determination within 180 days of receiving the EOB. (Doc. 34 at 10.) Tawater alleged that she received the EOB in July 2014. Id.

         BCBSMT argues that the Plan required Tawater “to provide notice that she contested the determination” by January of 2015. Id. BCBSMT claims that Tawater's statute of limitation period expired three years after this notice-in January of 2018. Id. BCBSMT contends that Tawater's filing of her Complaint in February of 2018-one month after the limitations period had expired-bars consideration of her claims. Id.

         Tawater agrees that the Plan provides a three-year statute of limitations period to file a complaint. (Doc. 27 at 28.) Tawater notes, however, that the Plan's statute of limitation period accrues at “the expiration of the time within which proof of loss is required.” Id. (citing Doc. 13-1 at 106) (emphasis added). Tawater interprets “the expiration of the time within which proof of loss is required, ” as used in the Plan, as “no later than 12 months after the date of service.” (Doc. 27 at 28) (citing Doc. 13-1 at 50).

         Guardian transported Tawater on July 10, 2014. (Doc. 27 at 28.) Tawater contends that the Plan allowed her to file her proof of loss until July 10, 2015. Id. Tawater contends that the expiration of this July 10, 2015, date in which to file her proof of loss triggered the running of the Plan's three-year statute of limitations period. Id. at 28-29. Tawater contends, under this interpretation, that the statute of limitations period should have expired on July 10, 2018. Id. at 29. Tawater argues that she timely filed her Complaint on February 26, 2018. Id.

         A claimant generally must file her claim within the statute of limitations period. Heimeshoff v. Hartford Life & Acc. Ins. Co., 571 U.S. 99, 105 (2013). Statutes of limitations generally “begin to run when the cause of action accrues- that is when the plaintiff can file suit and obtain relief.” Id. (quoting Bay Area Luandry and Dry Cleaning Pension Trust Fund v. Ferbar Corp. of Cal., 522 U.S. 192, 201 ...

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